I’ve seen this question a lot that it would be irresponsible to tell each of you how much to charge based solely on looking at your portfolio (skills and level), your residence, and the market. We all have unique needs, priorities, and possibly multiple knowledge or skills that can affect our work’s worth (compensation).

Before Asking Again…

To accurately answer this question, it is necessary to create an analysis of your current situation. Have an idea of who you are, and what you love/are great doing. Especially what you desire to become and where you want to go or belong. It is important to recognize that each of us has a quality of life, and we are responsible for our well-being.

The Misconception And Dilemma

People cannot expect creatives to be paid the same, regardless if it’s a simple illustration or if the artist lives in a country where labor is cheaper. All of us deserve a livable wage for our labor and life quality. Also, is a good idea to research and analyze the market rates, but do keep in mind that demands change periodically, industries are in constant adaptation, and so are our living costs. Do these individuals or circumstances should charge the same?

• A family with 2 newborns and a new house vs. an independent person with a chronic illness living in an old apartment.
• A college student without a health insurance plan and a part-time job vs. an expert (no degree) with a permanent full-time job and benefits.
• A person from South America does not earn the same or have the same clientele vs. a North American or European person.
• A creative who charges a commission for an illustration (for personal use) for a client with a Google document of 2 pages with a brief description vs. a creative who charges a “Work For Hire” project (commercial use and waiver of rights) for a small business with its bible of references and visuals.
• A business that relies on employees from different departments (federal minimum pay with no benefits) to complete a project vs. an independent freelance creative who will handle the project alone or subcontract colleagues.

If you are a business or freelancer, don’t stick to one source of income; have multiple revenue streams with different pricing strategies (hourly, flat fee, or based value) for growth and consistency. These can include “passive income services” such as sponsors, referral programs, affiliate marketing, online courses, YT channel with YT Partnership, digital products with automatic and instant delivery/downloads, etc.

Profit Margin

Profit is gross income minus expenses. So basically, the cost of completing a project is an expense, and any revenue beyond that (the expense and any other charges) is your profit. When it comes to freelancers, they usually charge a profit margin between 15% to 30% for each project. There could be a probability that some of them may charge higher, especially those who run their small business (with employees or subcontracting other freelancers).

The percentage indicates and measures how profitable your business is for the revenue it generates from each successful sale of the product or service offered. The efficient use of raw materials, the production of your labor, and the control of expenses represent a thriving pricing strategy. Only similar companies should be used to compare profit margins, which differ by industry.

Market Value

It is the value of the product or service within the market where it can increase or decrease depending on its demand, conditions (trend, competition, and customer sentiment), supplies (availability), and compensation, among other factors.

Never Charge The Federal Minimum

Remember that depending on your job position, you will have several deductibles from your paycheck that must be reported and paid to your government (Medicare, Social Security, income tax, among other things based on Puerto Rico and the USA rules). Additionally, filling out your official documents will require an investment, and you will depend on a professional to complete it for you.

Regular Employee VS. Freelancer

People have a bad habit of expecting freelancers to be paid the same or less than the federal minimum wage. Here I will show you a comparison between what a regular worker is versus a freelancer.

What To Calculate As Expenses?

These should be the 3 main departments or fields that you need to be aware of. By calculating each of these, you’ll have an accurate idea of how to calculate your desired annual income. You don’t have to answer all of these, but it is worth having them in consideration if these apply to you. Calculate these expenses weekly or monthly.

Worth Of Your Work/Taxes

How To Calculate My Desired Salary?

I have 2 ways to calculate my desired salary: studying the annual salaries from job posts and estimating my desired salary by comparing my previous one from past jobs, or calculating my monthly expenses, hourly rate, and work days I want to achieve annually.

• Estimating Work Hours: 40 hrs. weekly x 50 weeks per year = 2,000 hrs.
• Total Expenses: Domestic, Insurance, and Worth of Work/Taxes + Desired Salary + Profit Margin (20%) = $75,000
• Hourly Rate: $75,000 ÷ 2,000 hrs. = $37.50 p/h

Sophisticated Calculator With Deductions

I recommend the ADP Salary Paycheck Calculator if you want to see a live calculation of your desired annual salary with the essential deductions from your paycheck. This can work for people in the USA, including Puerto Rico, and Hawaii.

Thank You For Reading!

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